Foreign traders say they are feeling the impact of China’s arrivals

An annual survey released Thursday by the American Chamber of Commerce in Shanghai showed that 45% of the 338 members surveyed said China’s strict rules related to entering the country had a negative impact on their operations, while one More than a quarter said they impacted profitability. in country.

China has mostly closed its borders since March 2020 to keep Kovid-19 cases under control. Travelers need special government approval to enter China, and those who enter must be quarantined for up to 28 days. Visa issuance is very limited, and many migrants have had to travel without their family members, who were unable to obtain visas.

Jeffrey Lehmann, chairman of the chamber’s board of governors, said it has been difficult for multinationals to send employees from overseas to China, which involves senior executives assessing the market or critical engineering talent.

This year, more respondents said they felt the government’s bias toward local companies. Half of the companies that took part in the AmCham Shanghai survey, conducted in June and July, felt strong or some bias towards local companies, up from 47% a year earlier, particularly in technology such as hardware and software, pharmaceuticals and medical devices and life. in areas. Science.

Nevertheless, the AmCham Shanghai survey indicated that among its member companies, optimism about the outlook for business in China increased this year after declining in the past two years. Seventy percent of AmCham Shanghai’s members surveyed expect revenue growth in China over the next three to five years to outpace their global operations.

The EU Chamber of Commerce in China echoed similar sentiments in a report on Thursday. In its annual China position paper, the chamber cautioned that the role of state-owned enterprises in China’s economy is set to grow.

“China is about balancing development and control. Now, control is more important than development,” Chamber President Jörg Wutke said at a news conference ahead of the report’s release.

The EU Chamber said China was favoring state-owned enterprises over foreign companies. This was especially in areas such as medical equipment and fire fighting equipment, where the chamber said it has seen a “buy China” policy in public procurement.

China’s State Council Information Office and the Foreign Ministry did not immediately respond to requests for comment.

The EU Chamber also said in its report that China’s push for national security and self-reliance ran the risk of alienating foreign businesses and could ultimately damage its economy in the long term.

China is moving to eliminate its dependence on other countries by prioritizing Chinese companies and domestic consumption as the main drivers of economic growth, which is widely translated as “dual circulation”. Foreign investment, talent and exports and multinationals operating in China fear their technologies and investments may play a more supportive role.

The European Union Chamber said China’s strategy could lead to a decline in foreign direct investment and a decline in innovation.

European companies were also facing a rise in nationalism among consumers in China and were feeling more vulnerable to boycotts due to geopolitics, Wutke said.

Swedish retailer H&M Henness & Mauritz AB was the subject of consumer boycott calls in China earlier this year after the company raised concerns about allegations of forced labor in the country’s western cotton-producing region of Xinjiang.

According to the Amcham Shanghai survey, about 13% of retail and consumer members surveyed said they have reduced planned investments in China because of the Chinese consumer boycott.

Both groups said their members were committed to the Chinese market and were not leaving the country.